Amidst all the gloomy outlooks about the economy, as well as how many consumers are filing for bankruptcy, let’s turn to some positive analysis from S&P Global Ratings about how the U.S. auto loan asset-backed securities (ABS) market is doing.

S&P Global Ratings said March performance reflects normal seasonal trends, showing improvement month-over-month for most metrics in both the prime and subprime segments.

Analysts indicated subprime auto loan annualized losses decreased to 7.98% for the month from 8.71% due to higher recoveries in March.

S&P Global Ratings also noted that 60-day delinquencies continued to decline in March but remained elevated compared to one year earlier.

Analysts added losses remained higher than last year, due in part to recoveries declining from March 2024.

According to the report shared with Cherokee Media Group, analysts found that the subprime static pool 2023 vintage performance continues to track better than 2022.

At month No. 17, S&P Global Ratings discovered losses for 2023 were 7.30% compared with 7.99% and 8.00% for 2022 and 2008, respectively.

Analysts added the Q1 2024 vintage though is trending worse, with cumulative net losses of 4.96% than the 2023 annual vintage, which was 4.78% at month No. 12.

The subprime sector’s 2023 and quarterly 2024 vintages are reporting lower cumulative net losses than 2022’s near-record-high levels. However, 60-plus-day delinquencies and cumulative recovery rates remain weaker than normal,” S&P Global Ratings said in a news release.

For the third month in a row, S&P Global Ratings noticed prime auto loan recoveries and delinquencies improved.

Analysts said prime annualized losses remained relatively flat at 69 basis points, while recoveries increased to 61.32% in March from 55.83% in February.

“Additionally, 60-plus-day delinquencies declined slightly, reflecting the lowest level of delinquencies we have observed over the past year. On a year-over-year basis, prime losses rose slightly, 60-plus-day delinquencies remained stable, and recoveries improved from last year,” S&P Global Ratings said.

S&P Global Ratings closed by mentioning its April U.S. surveillance reviews resulted in 11 upgrades, no downgrades, and 66 affirmations.

“Of the 17 U.S. transactions reviewed, we increased our expected cumulative net loss levels for 14 transactions, decreased it for one, and maintained it for two. We also reviewed two Canadian transactions. We currently have 10 subprime subordinated classes on CreditWatch negative,” analysts said.